March 2022

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Starting April 1, property owners in low-lying areas across the country will see their premiums increase when they renew their flood insurance policies, thanks to the federal government’s new flood-risk rating system.

Some policyholders could see premiums drop under Risk Rating 2.0, which officials have said is designed to be more equitable and accurate, reflecting the use of more precise computer flood-modeling techniques.

“Risk Rating 2.0 is not just a minor improvement, but a transformational leap forward,” the Federal Emergency Management Agency said in a statement. “Risk Rating 2.0 enables FEMA to set rates that are fairer and ensures rate increases and decreases are both equitable.”

The new rating system took effect for new National Flood Insurance Program policies last October, but kicks in April 1 for renewals. Many homeowner groups and elected officials have complained that the new system will mean much higher premiums for millions of people.

In North Carolina, 74% of policyholders could see an increase, starting Friday, according to local news reports. But about 26% could see a major decrease in costs.

“Now the riskiest properties are going to have to foot the bill themselves,” Quote Wizard’s senior analyst, Nick VinZant, told WWAY TV news in Wilmington, North Carolina. “The high house on the hill that never floods is no longer paying for the beachfront mansion. And the beachfront mansion is going to have to pay a lot more.”

Flood experts have said forcing affluent waterfront properties to finally pay a more realistic price on insurance is a good thing, and can discourage more building in flood-prone areas.

In some parts of Florida, the cost of flood insurance is expected to eventually increase by 1,000%, the New York Times recently reported after analyzing NFIP data. Until recently, a Tampa homeowner paid about $480 a year for a flood policy. That could eventually top $7,000 a year after annual increases.

The NFIP was established by Congress in 1968 and is the primary provider of flood coverage, which isn’t widely available from private insurers. Aside from revenue from premiums, NFIP also can borrow money from the federal coffers to cover claims. The program now insures more than 4 million homes around the U.S., but critics have charged that it has subsidized coastal building for well-to-do property owners, and was bad public policy.

FEMA said in 2019 that it would adopt the new rating system, but it was delayed by President Trump’s administration. It has now finally become reality, just in time to reflect stronger storms, rising seas and more rainfall in some parts of the country, advocates have said.

“With a rapidly escalating threat of natural disasters, Risk Rating 2.0 is a much needed and timely change,” Laura Lightbody of the Pew Charitable Trusts, told the newspaper. Higher insurance costs are “a reflection of our new, wet reality,” she said.

Premium increases are limited by federal law to no more than 18% per year. So with Risk Rating 2.0, about 2.4 million homes will see rates increase by moderate amounts this year, the Times has reported. Another 627,000 should see premiums drop after the April 1 renewals.

An estimated 330,000 homes could see premiums climb by a few hundred dollars this year, and about 25,000 homeowners could see costs rise by more than $1,200 in the first year, with more increases later, FEMA has said.



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The Demotech rating firm has withdrawn the financial stability rating for another Florida-admitted insurer, Lighthouse Property Insurance. It’s an ominous sign for the company and for Florida’s deteriorating property insurance market.

“Despite a substantial capital contribution in the fourth quarter 2021, the operating loss in 2021, which reflected the evaluation of losses and loss adjustment expenses associated with Hurricane Ida, resulted in a level of capitalization below what was needed to sustain FSRs at the A level,” Demotech President Joe Petrelli said in a statement Monday.

The withdrawal comes six weeks after Lighthouse announced it would stop writing new policies in Florida as it tries to manage an increase in reinsurance costs. Sources said those costs, along with Louisiana losses from Hurricane Ida last year, may have led to the company’s current financial situation.

The carrier had 13,200 policies in force in Florida at the end of 2021, according to the Florida Office of Insurance Regulation. Besides Florida and Louisiana, Lighthouse also is admitted in North Carolina, South Carolina and Texas and had 170,000 homes insured in all five states in 2020. That year, it reported $56 million in surplus. But by the third quarter 2021, the policyholder surplus was just under $19 million, Demotech reported.

Lighthouse was founded in 2008 in Louisiana and has its Florida offices in Tampa.

Lighthouse Property’s previous rating was “A, exceptional,” according to the insurer’s website. Demotech this week also withdrew its rating for a sister company, Lighthouse Excalibur Insurance, which was formed when Lighthouse acquired Louisiana-based Excalibur National Insurance Co. in 2019.

Company officials could not be reached for comment Tuesday, and it’s uncertain what the next step will be or if Lighthouse will avoid insolvency. Two other companies that suspended new business in Florida and lost their Demotech ratings this year, St. Johns Insurance and Avatar Property & Casualty Insurance, were deemed insolvent by Florida regulators less than two weeks later.

Five Florida property insurers have been placed into liquidation in the last three years. Six carriers have suspended new homeowners writing in Florida in the last six months, and one has stopped renewing thousands of policies.

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Lighthouse’s difficulties underscore how rapidly things can change in Florida’s distressed market. Lighthouse entered Florida in 2020 when it acquired Prepared Insurance Co. In December of 2021, the parent company signaled that it raised $65 million in capital to refinance debt and to fuel company growth.

By the end of the fourth quarter, Lighthouse had $25.4 million in total premium written in Florida, according to the OIR’s supplemental quarterly report. That was a significant drop from the previous quarter, when Lighthouse reported almost 19,000 policies and $38 million in total premium. At the end of 2021, it had $5.4 billion in exposure for policies that include wind coverage.

The company this year has filed for Florida rate increases based partly on its reinsurance needs.

Lighthouse for two years was led by David Howard, who left the company last year to become president of the startup Vyrd Insurance Co., one of the few new companies to enter the Florida market in several years. Patrick White is listed as the current CEO and president of Lighthouse Property Insurance.

By William Rabb

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A special insurance-reform session of the Florida Legislature probably won’t happen before November, when a new House speaker takes office. But the state’s insurance regulators are taking steps on their own to help cut the cost of roof claims.

At at meeting of the Florida Cabinet on Tuesday, Insurance Commissioner David Altmaier revealed that his Office of Insurance Regulation will now allow property insurers to offer roof deductible endorsements as well as a schedule on what will be paid on roof replacements.

“That will give companies more latitude,” said William Stander, director of the Florida Property & Casualty Association. “We’re glad to see OIR moving forward on this.”

Stander said that Florida statutes appear to give the agency the authority to make the regulatory change without need of legislation. Similar roof deductible provisions were included in Senate Bill 1728, which passed the state Senate in the recent regular session this year, but stalled in the House.


Altmaier did not say why the roof deductible change hasn’t been adopted by OIR before now, or when it would begin, and his office could not be reached Wednesday morning. He said after the meeting that the OIR action, to be done through forms that insurers must file, will require consumers to decide upfront on the deductible option, while the proposed legislation would have made it standard for some policies.

Because the administrative change leaves it to policyholders to choose, it may not have a widespread impact, said Logan McFaddin, Florida representative for the American Property Casualty Insurance Association.

Altmaier also noted at the meeting that Florida appears to be the only U.S. state that requires full roof replacement when only 25% of the roof is damaged.

“And then there are arguments about whether it’s actually 25%,” Altmaier said. “I’m trying to think of the right word: There may be some gamesmanship when people begin to discuss whether it’s 25% damaged or not.”

SB 1728 would have done away with the roof replacement requirement for some policies, except for damage sustained during named storms.

Meanwhile, a day after Gov. Ron DeSantis called a special session of the Legislature to take up his version of a Congressional redistricting plan in April, he said another session to address insurance issues probably won’t happen before November. That’s when Rep. Paul Renner, R-Palm Coast, takes the speaker’s gavel from Rep. Chris Sprowls. It’s another indication that Sprowls is not inclined to take on insurance changes.

A November special session may come too late for some Florida property insurers struggling to stay afloat. June 1 is when many carriers must renew their reinsurance, and prices are expected to increase dramatically.

“We’re entering into a pretty critical couple of months coming up as carriers go into the reinsurance market,” Altmaier said. “That could potentially be a challenging experience for some of these carriers.”

At a press conference after the Cabinet meeting, Altmaier responded to a reporter who asked why the OIR did not appear to be very active on insurance reform issues during the regular legislative session that ended March 11.

“Well, I would say that just because we’re not behind a podium doesn’t mean we’re not in a room somewhere talking to someone,” Altmaier said, according to a video recording of the press conference, posted on the Florida Channel website. “So I would reject the notion that we weren’t present during session.”

“But you didn’t make any recommendations,” the reporter added.

“I would also reject that as well,” the commissioner responded. “Conversations happen in a lot of different places.” He also denied that the governor’s office had pressured him to not speak up about the insurance crisis.

On lowering the retention level that property insurers have to meet, or the level of catastrophic losses incurred before they can tap into the Florida Hurricane Catastrophe Fund, Altmaier said that would require legislative action. His office is still weighing the pros and cons of the idea.

He also said his office is “working around the clock” to ensure that insurance is available and affordable to homeowners.

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Florida’s home insurance availability crisis continues to claim new victims, and worries are mounting that more companies could be declared insolvent as this year’s hurricane season draws near. The industry’s financial storm clouds have prompted fears of collapsing companies and the massive growth of state-owned Citizens Property Insurance Corp., the insurer of last resort: —Last week, the president and CEO of Demotech, which rates the financial stability of about 50 Florida-based insurers, sent a letter to the governor and leaders of the House and Senate imploring them to call a special session and enact reforms to stem financial losses and litigation. Without reforms, he said, Demotech will likely downgrade financial stability ratings of “a number” of insurers. TOP VIDEOS WATCH MORE × Alleged hitman counting money paid to him for the murder of Miami TSA officer —About 37,000 customers of failed Avatar Property & Casualty are scrambling to find new insurers before losing coverage on April 13. But about 2,000 have open claims against the company that won’t be resolved for months. Just about all insurers, including state-run Citizens Property Insurance Corp., have underwriting guidelines disqualifying from coverage anyone with unresolved open claims. —Meanwhile, Lexington Insurance Co., which specializes in covering homes with replacement values of $1 million or more, announced last week that it’s discontinuing its home insurance division, which will force 8,000 Florida property owners to find new insurers. Most of them are not eligible for Citizens, which only insures homes up to $700,000 in most parts of the state. $2 for 2 months Subscribe for unlimited access to our website, app, eEdition and more CLAIM OFFER Last week, Gov. Ron DeSantis said he’d “welcome” a special session to enact insurance reforms, but indicated he would not call one on his own. Instead, he left the proposal up to leaders of the state Senate and House. So far, there’s been no indication that Senate President Wilton Simpson and House Speaker Chris Sprowls plans to call a special session, said Sen. Jeff Brandes, a Tampa-area Republican who has repeatedly warned that the state faces an insurance crisis that could undermine Florida’s booming real estate market. The Senate passed a bill in the recently completed regular session aimed at curbing the number of “free roof” claims and related lawsuits that insurers say are driving up costs for all of their customers. But the House refused to consider any major insurance reforms. THE FOREBODING LETTER In Demotech’s March 23 letter to DeSantis, Simpson and Sprowls, five Demotech executives, including its president and co-founder Joesph Petrelli, warned that failure to enact reforms before the June 1 start of hurricane season would lead to grave consequences. Business newsletter Keep up with local business news and small business advice. SIGN UP This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. “The conditions of the property insurance marketplace in Florida are unsustainable,” the letter said, “and without the necessary corrective action, many Florida insurers will struggle to maintain adequate surplus, efficient capital sources will avoid the market, private reinsurance costs will become prohibitively expensive, and consumers will ultimately bear the cost.” Longtime leaders in the insurance industry believe that some companies won’t have enough cash, financing, or investment capital to purchase reinsurance, which is required so insurance companies have the ability to cover claims likely to roll in after a 1-in-100-year storm event, such as a major hurricane. Insurers that fail to maintain an adequate surplus of claims-paying capital could be declared insolvent by state insurance regulators, and their policyholders would likely be forced into Citizens. Citizens’ growth always prompts worries: If it grows too much and cannot pay all claims after a major hurricane, assessments could be levied against nearly all insurance policies in the state to make up the shortfall. Citizens, which was down to 419,000 policies in 2019, has been quickly swelling with new customers who can’t get covered in the private market. As of March 25, Citizens was up to 807,910 policies. Four Florida-based insurers have been declared insolvent since April 2021. Many others have stopped writing policies in high-claims areas of the state, such as South Florida, and declined to renew policies covering older homes or homes with roofs older than 10 years. Insolvencies could also result from Demotech withdrawing companies’ financial strength ratings or downgrading companies’ ratings from A for “acceptable” to S for “satisfactory.” A downgrade effectively puts a company out of business, either by prompting state insurance regulators to declare the company insolvent and transfer it to a receiver, or, in the case of any rating lower than A, disqualifying the insurer from covering any property backed by a federal mortgage guarantor, such as Fannie Mae and Freddie Mac. Demotech’s letter warned lawmakers to expect ratings downgrades if no special session is called. “If current market conditions remain in place, we anticipate that we will downgrade Financial Strength Ratings of a number of companies in the coming weeks,” the letter said. Simpson has called the idea of a special session to address insurance “a possibility,” according to a March 11 statement relayed by a spokeswoman. Sprowls’ office on Monday did not respond to questions about a special session. More companies might have to fail before the Senate and House leaders call a special session, Brandes said. “Sometimes you have to force a crisis to get the legislature to act,” he said. REPLACEMENT POLICIES HARD TO FIND WITH OPEN CLAIMS A former Avatar policyholder says she’s already facing a crisis. Mimi Bright, a homeowner in Parkland, has been trying to find coverage since learning her Avatar policy would expire in mid-April. But she has an open damage claim with Avatar, and her agent told her that no insurer, including Citizens, will cover her until the claim is resolved. That could take several months. Under terms of Avatar’s liquidation, the company’s open claims will be resolved by the Florida Insurance Guaranty Association, which is working its way through about 2,000 open Avatar claims. She doesn’t understand why state law does not require Citizens to offer coverage to policyholders left in limbo when their insurers are declared insolvent. “The state should be doing something to protect consumers,” she said. Despite what its underwriting guidelines say, Citizens is willing to cover Bright and other Avatar customers with open claims if they provide documentation that the claim has been submitted and repairs are in progress, says Citizens spokesman Michael Peltier and Kyle Ulrich, president and CEO of the Florida Association of Insurance Agents. “Obviously, [the Avatar dissolution] happened quickly, and we will be as flexible as we can be,” Peltier said. Homeowners will have to provide proof, such as a repair contract showing that repairs have been scheduled or proof that the repair process is underway, he said. Agents have to be tenacious and offer to provide the documentation, which could also include price estimates from contractors, Ulrich said. Citizens, Ulrich says, understands that “It’s in no one’s interest to have homeowners go without coverage for a period of time.” Corey Neal, executive director of the Florida Insurance Guaranty Association, said FIGA is willing to work with agents to provide information needed to help displaced homeowners secure replacement coverage. Some private-market companies, and not just Citizens, will cover a stranded homeowner when FIGA or a policyholder’s agent reaches out, Neal said. “If the underwriter wants more information about a loss, we’ll absolutely help them. One of our first priorities is to help find replacement coverage. Hardship claims go to the top of the list.”

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Lexington Insurance, an AIG company, is pulling out of the Florida homeowners market, leaving an estimated 8,000 affluent customers looking for coverage.

And those homeowners likely won’t be able to turn to Citizens Property Insurance Corp., the state-backed insurer of last resort, which insures homes only up to $700,000 in much of the state, the South Florida Sun Sentinel newspaper reported. The Boston-based Lexington, classed as a surplus lines carrier in Florida, specializes in homes with replacement values of $1 million or more. The company appears to be discontinuing its personal lines division nationwide on Aug. 1, the news site said.

The Lexington announcement to local agents may be seen as the latest marker for Florida’s struggling property insurance market, beset by hurricane losses, roof claims and litigation. At least six other insurers have stopped writing new homeowner policies in the state or have non-renewed thousands of policies. Two of those companies, St. Johns and Avatar, have been deemed insolvent this year and more liquidations are expected, despite rising premiums for policyholders.

A number of stakeholders in Florida have urged the governor and top lawmakers to convene a special session of the Legislature soon to tackle reforms that could limit losses and litigation costs, before many insurers must purchase reinsurance on June 1. Reinsurance costs are expected to increase sharply then, jeopardizing more carriers.

The governor has said he is not opposed to a session if legislative leaders will call one. So far, House and Senate leaders have not indicated their intentions.

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The Demotech rating agency has joined the relatively small number of voices calling for a special session of the Florida Legislature to enact changes that insurers hope will help curtail fraudulent roof claims, deter excessive litigation and address other needs.

In a letter last week to Gov. Ron DeSantis and legislative leaders, Demotech President Joe Petrelli wrote: “The conditions of the property insurance marketplace in Florida are unsustainable and, without the necessary corrective action, many Florida insurers will struggle to maintain adequate surplus, efficient capital sources will avoid the market, private reinsurance costs will become prohibitively expensive, and consumers will ultimately bear the cost.”


Petrelli, who co-founded Demotech in 1996, said that the firm’s ratings in recent years have been predicated on the expectation that the Legislature would address reforms to Florida’s rather unique claims procedures, practices and protocols. No significant measures passed in the 2022 regular legislative session that ended March 11, leaving many to warn that more insurer insolvencies and steep rate increases will soon follow.

“Based upon the most recently reported operating results, as well as historical operating results of the insurers we review and rate, and if current market conditions remain in place, we anticipate that we will downgrade the Financial Stability Ratings® assigned to a number of companies in the coming weeks,” Petrelli wrote.

One milestone that some insurance carriers are dreading comes in June, when many must renew their reinsurance, and prices are expected to jump.

“We believe that certain meaningful and significant legislative reform, if enacted during a special session prior to the most common renewal date for reinsurance treaties, June 1, may create circumstances permitting us to maintain ratings for some of those insurers currently expected to be downgraded,”

He urged lawmakers, if called into session, to address ways to minimize claims litigation and contingency fee multipliers, and to ease the retention requirements of the Florida Hurricane Catastrophe Fund, which would provide some relief to insurers.

DeSantis has said he is open to a special session, if legislative leaders call one. State Sen. Jeff Brandes, R-St. Petersburg, also has urged the governor to convene an insurance-focused session. So far, though, House and Senate leaders have not joined the call.

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Florida’s constitution and statutes allow the governor to call a non-scheduled session together. The president of the Senate and the speaker of the House of Representatives also can issue a joint proclamation convening the Legislature. Another method: 20% of legislators can petition for a session, then three-fifths of both chambers must approve and set the date, statutes read.

Demotech’s nudge comes amid more bad news about Florida’s distressed property insurance market. Another rating firm, AM Best, said it had downgraded the financial strength rating of Florida Farm Bureau insurance companies from “A- (excellent)” to “B++ (good),” thanks in part to unfavorable reserve amounts.

Farm Bureau announced in late January that it would stop writing new homeowner policies in Florida, making it one of five carriers to take similar action.

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The Florida Office of Insurance Regulation will hold a hearing on Thursday, March 31, to examine a request by Citizens Property Insurance Corp. for a near-maximum rate increase for most of its policies.

Citizens, limited by its statutory “glidepath” to a maximum increases of 11% this year, in December filed for close to that on 14 lines of insurance, including 10.7% for homeowners multi-peril; 10.8% for dwelling fire; and 11% for commercial non-residential, wind-only, according to the OIR notice filed with the Florida Administrative Register.

If ratified by the state’s insurance commissioner, the higher rates for most lines would kick in August 1.

The increases were signaled late last year, when the Citizens Board of Governors overrode a staff recommendation of a 7.3% increase for homeowners policies. Florida law had limited Citizens’ rate hikes to no more than 10% per year but the Legislature changed that in 2021 to allow incrementally higher rates until overall increases reach 15% in 2026.

Citizens officials and state lawmakers have grown increasingly concerned about the state-backed insurer’s rapid growth, which, in case of major disasters, could wipe out a $6.5 billion surplus and put taxpayers on the hook, some have said. The corporation has instituted a depopulation plan, which includes many more inspections of properties, along with other measures. Bills that would have required policyholders to switch to private carriers if premiums were slightly higher did not pass in this year’s regular legislative session.

The virtual rate hearing is set to begin at 1 p.m. Eastern time. Access is available here, or stakeholders may listen by phone. The call-in number is 1(866)901-6455 and the access code is 696-660-667.

Written comments will be accepted through April 14. They can be emailed to; the subject line of the e-mail should read, “Citizens Property Insurance Corporation,” the OIR noted.

Auto insurance premiums are rising across the US. Don’t let that stop you from saving.

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There are ways to save on your car insurance premiums.Boonchai Wedmak/Getty Images

Car insurance rates are rising in 2022. Throughout the US, major car insurers are receiving approval for substantial rate increases — with Geico, Progressive and Allstate leading the way. This trend started at the close of last year, with major insurers raising premiums anywhere from 3% to 12%, according to S&P Global Market Intelligence.

Skyrocketing inflation is the primary reason for these rate hikes, driving up prices for goods and services across the US. Along with higher auto insurance rates, gas prices have also hit record highs, making driving more expensive.

Despite these rising costs, there are plenty of ways to keep more money in your pocket. Here’s an overview of ways to mitigate increasing insurance costs. 

1. Increase your deductible 

Increasing your deductible — your out-of-pocket cost before your insurance will pick up the bill on a claim — can lower your premium. This move might make sense if you aren’t driving much right now, do not have a history of accidents on the road or if you need to reduce your monthly costs to stay insured. Doing this could cost you later if you’re in an accident, though, as you’ll have to dish out more money before your carrier covers damages. You should make sure you have enough money to pay the higher deductible if you do end up in an accident.

2. Consider lower coverage for older vehicles

Older cars may not deserve the same insurance attention as your shiny new Tesla or all of the bells and whistles of a Mercedes-type policy. If your car is on its last go-round, you may want to cut out collision coverage or comprehensive coverage for that vehicle, both of which cover damages to your car.

Whether you should drop either coverage depends on the value of your car and the relative cost to insure it. Experts suggest that if your car is worth less than 10 times the annual premium, buying coverage for that vehicle may not be a cost-effective option. One of the quickest ways to check the value is by scrolling through Kelley Blue Book online. For example, say your annual premium is $1,600; 10 times that would be $16,000. If your car is worth less than $16,000, then it might make sense to lower insurance coverage for that car.

3. Lower your mileage by using mass transit or carpooling 

Carriers may offer discounts if you have a low mileage count, meaning you drive less than the average number of miles per year compared to other Americans. Typically, you’d be considered a low-mileage driver if you drive less than 7,500 miles per year, but this isn’t a bright-line rule. What actually determines if you’re a low-mileage driver depends on what state you live in, your age and gender.

How much could you save? The national average annual premium for Americans who drive 5,000 miles or less is about $1,612, according to Bankrate. State Farm also offers one of the cheapest monthly premiums at $128 for low-mileage drivers, according to one analysis

If there is mass transit in your area, taking a bus a few days per week (or carpooling with others), could make you eligible for low-mileage discounts. If you don’t live in an area with mass transit, you might also consider carpooling to work or school to bring your mileage down.

And if you transitioned to working or studying from home since the start of the pandemic and still haven’t shifted back to an in-person workplace, contact your carrier to let them know — and take advantage of any savings.

4. Bundle your insurance

One of the most straightforward ways to save money on insurance is by bundling your home and auto insurance, meaning you buy multiple insurance policies from the same company.  

AllstateLiberty Mutual and GEICO each offer premium discounts for bundling — depending on which policies and coverages you buy together. You can get discounts on your premium anywhere from 5% to 25%, depending on the provider. 

5. Shop around for rates

Maybe you’re working from home permanently and need less coverage. Or perhaps you’re returning to the office and need more coverage now. Whatever your situation may be, it’s always a good idea to shop around to ensure you’re getting the best rates, as other carriers might offer bigger discounts or lower premiums in general. 

If you aren’t sure where to start, check out CNET’s car insurance roundups, where you can see our picks for best overall car insurancethe cheapest car insurancethe best policies for teens and young drivers and the best options for military and veterans.

6. Safe travel discounts

If you pride yourself on being a safe traveler, you’re in luck. Carriers offer discounts for safe driving and modest claims history, and there are a number of discounts to take advantage of here. Call your carrier to ask how you can enroll in these types of programs. Once successfully

By William Rabb

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Citizens Property Insurance Corp. directors said Wednesday they continue to worry about the state of the Florida insurance market, Citizens’ growth and its potential losses, despite $6.5 billion in surplus and an $81 million net gain for 2021.

“We just want to be solvent so when a CAT event comes, we are not sticking Floridians with Citizens’ assessments across the state,” Citizens Board Chairman Carlos Beruff said at the insurer’s quarterly board meeting. “That is my mission.”


The state-backed insurer of last resort, which has grown to be the largest property/casualty carrier in Florida, has posted underwriting losses since 2015, as have many other carriers. In 2021, Citizens saw underwriting losses of almost $166 million, company reports show. But thanks to its large surplus, the carrier has been able to offset the losses with significant investment income.

But other Florida insurers haven’t been so fortunate. Two were deemed insolvent this year, thanks in part to inadequate reserves. That means more jilted policyholders will turn to Citizens and its statutorily limited premium increases, despite a Citizens depopulation plan now underway. The insurer is expected to top 1 million policyholders by the end of the year, president Barry Gilway said at the meeting, giving it almost twice as many insureds as the next-largest carrier in the state.

Gilway gave a stark scenario of what so many policies-in-force could mean: In 2017, when Hurricane Irma hit parts of the state, Citizens held 400,000 policies and saw 78,000 claims. If another Irma-level hurricane, with winds as high as 185 mph were to hit this year, Citizens could have as many as 200,000 claims, he said.

“The recent insolvencies are concerning but what really concerns me is the financial condition of the remaining companies,” Gilway told the board.

His report showed that of the top 10 domestic carriers in Florida, all but two had posted net losses for 2021. Three showed losses of more than $100 million, outpacing 2020’s red numbers when only one insurer posted a net loss of more than $100 million.

Overall, Florida domestic and foreign companies saw just over $1 billion in net losses for 2021, according to S&P Global Market Intelligence Data, Gilway noted.

Citizens’ $6.5 billion in surplus may seem like a huge number, especially when compared to the other 52 Florida insurers, which have a combined surplus of $3.6 billion, Gilway said. But he warned that reducing the Citizens’ surplus would mean less money for investments, which has kept the insurer in the black.

Directors urged staff to continue to find ways to reduce costs and strengthen the bottom line in the midst of a worsening Florida market, high levels of claims litigation, and no rescue bills approved by the Florida Legislature so far this year. Staff reported that Citizens’ total workforce, 1,841, is about what it was in 2009, but is 17% higher than in 2015 when the insurer employed 1,571 people.

The big driver behind costs continues to be litigation, officials said. The carrier reported $343 million in loss adjustment expenses in December 2021, some $94 million more than in December 2020. Gilway said that in 2013, Citizens fielded 27,000 litigated claims. By last year, the number had climbed to about 100,000.

“It clearly is the litigation,” especially for water-related claims, one official said. “This is our Alamo – water claims. The sinkhole (problem) got fixed, now they’ve another loophole. We need to close that loophole.”

Chart: Courtesy of Citizens. Homeowner insurers ranked by direct premiums written in 2021.

Location, size, age, coverage limits, and other factors all affect the cost of homeowners insurance.

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Homeowners insurance costs are never one-size-fits-all. Multiple factors influence how much you’ll pay for homeowners insurance on a $150,000 house, including location, style, age of the property, how you’ll use the home, what’s inside, and how much protection you want. 

The insurer you choose, and how it assesses your home’s level of risk, will also affect your home insurance costs — so it’s important to compare quotes to find the best insurance rates available to you. Credible makes it easy to see quotes from multiple homeowners insurance providers.$150,000%20house?&meta_articleTags=/FOX%20BUSINESS/Credible,/FOX%20BUSINESS/Personal%20Finance,/FOX%20BUSINESS/Money/Insurance&meta_segmentId=d505313b-d5fd-4681-8880-ac6c0c2cf67e&meta_contentCategory=personal-finance&meta_contentDistributor=owned&meta_campaignCode=&meta_pageUrl=

How much does homeowners insurance cost?

Put simply, there’s no straightforward answer to this question. 

The cost of homeowners insurance on any home varies based on those factors mentioned above, with location being one of the most impactful. The price you’d pay for coverage on your home in one state — or even in a specific area of town — could differ greatly from a different state or neighborhood.

For example, the average premiums on basic dwelling and personal property coverage for a $150,000 home run about $1,413 annually, across the country as a whole, according to the National Association of Insurance Commissioners (NAIC). In Arizona, though, the average annual premiums on the same home would be $336, while in Idaho and Alaska, it would be just $263.

On the flip side, insuring that same $150,000 home with the same basic coverage would cost you an average of $1,470 in Tennessee. That’s nearly six times as much as you’d pay in Idaho or Alaska.

Premiums vary from one state to the next for many reasons, including:

  • The risk of natural disasters, such as hurricanes, tornadoes, wildfires, or earthquakes
  • The local price of replacement building materials
  • Regional labor costs
  • Crime rates

No matter what the average homeowners insurance cost is where you live, comparison shopping may help you find the best possible price for the coverage you need.


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Factors that affect the cost of homeowners insurance

When it comes to building — and pricing out — a homeowners insurance policy on any home, insurance companies take many important factors into consideration. These factors tend to fall into three general categories: home-related, policy-related, and personal.

Here’s a look at why some of these factors are important and how they might affect your annual premiums on a homeowners insurance policy.

Home-related factors

First, an insurance company will typically take the specifics of your home into account. This allows the carrier to properly gauge how much of a risk your property poses and how much it would cost to repair, replace, or rebuild it following an eligible claim.

Location — Average rates vary from one state to the next, with expensive states running well above average and cheaper states costing much less. But each insurance carrier uses its own proprietary calculations that can take your city, county, and even specific neighborhood into account. And whether your home is in a rural, suburban, or urban area will also affect premiums. 

Age — The year a home was built can affect its insurance premiums in a few different ways. For example, a newer home will have newer components (roof, foundation, plumbing, electrical) which are less likely to fail and create a covered loss. 

But a newer home may have been built with upgraded materials or using newer building techniques, and it may cost more than an older property. An older home may have components with more wear and tear, architectural features that are difficult to replicate, or components that would be costly to replace. This could also raise replacement building costs.

Size — It stands to reason that the larger a home is, the more it will cost to insure. This is because a larger home would likely cost more in materials and labor to repair or rebuild after a loss, regardless of its market value. All other factors being equal, a $150,000 home that’s 900 square feet will usually have lower insurance premiums than a $150,000 home that’s 3,000 square feet.

Claims history — Insurance carriers are all about reducing risk. If you’ve made a claim against your homeowners insurance in recent years, this could negatively affect your premiums moving forward — at least until enough time has passed. Likewise, if you move into a home that’s had a significant claim before you owned it, that history may also affect your premium going forward.

Structures — Additional structures on your property mean more opportunity for a claim, so you can expect your home insurance premiums to also increase. Coverage for structures often includes attached garages, sheds, decks, a pool or guest house, or gazebo.


Policy-related factors

The next set of factors that affect cost center around the actual policy that you build: your specific coverage options, limits, and even the company you choose to buy the policy from.

Coverage limits — Having enough coverage to protect your home is imperative. But you also want to balance your coverage limits with your budget and needs. The higher your coverage limits, the more you can expect to pay in premiums. Conversely, the lower your coverage limits, the lower your premiums will likely be. 

You’ll need to choose both a dwelling coverage limit (protecting your home, related structures, and any permanent fixtures or appliances) as well as personal belongings coverage (for the things you own — like furniture, electronics, and clothes — that are inside your home). 


You can also opt in for additional protections, such as loss of use coverage (in case your home is damaged and you’re unable to stay there until repairs are complete). All these options will contribute to your cost of home insurance.

Deductible — Your deductible is the portion of your loss that you’ll be responsible for paying before your insurance coverage will kick in. The higher your deductible, the less your carrier will have to pay — so the lower your premiums may be. In fact, raising your deductible from $500 to $1,000 could save you up to 25% on your premiums, according to the Insurance Information Institute.

Discounts — If you qualify, discounts can make your home insurance policy more affordable. Different carriers offer different discounts that can reduce premiums, including discounts for multiple policies, having certain safety features installed in your home (security systems, smoke detectors, sprinkler systems, etc.), and even occupation- or affiliation-based discounts.

Company/insurer — As with any consumer product, you’ll likely get a different price from each different carrier that you compare. Every company has its own rates, discounts, risk calculations, and coverage options, so it can pay to get quotes from at least a few to find the best possible price.

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Personal factors

Lastly, here are some important personal factors that companies may take into account when calculating the cost of your homeowners insurance.

Credit — Believe it or not, insurance carriers often consider your credit history (and credit score) when determining premiums. Insurers can view a good credit history as an indication that you take care of your obligations. On the other hand, negative credit history can indicate to a carrier that you might be an increased risk.


Lifestyle — Some lifestyle choices can affect your homeowners insurance premiums, as they may pose added risk to your insurance carrier. These include owning specific dog breeds, insuring certain types of personal property, or having added risk factors (like a diving board or trampoline) on your property.

Where to get homeowners insurance on a $150,000 house

Finding homeowners insurance coverage on a $150,000 house can be a relatively simple search. Many national and regional carriers offer policies on houses of this value. You’ll just need to shop around to find a company that not only sells policies in your area, but also offers the best possible premiums.

It’s not enough to find carriers in your state, though; you’ll need to make sure they cover your specific location. For example, some insurance companies may insure houses in central areas of the state but refuse to write policies close to a high-risk coastline.

Consider asking around to see which carrier your friends, family, and neighbors use. You can also see if any of your other carriers (auto insurance, life insurance, etc.) write homeowners policies in your area, then comparison shop to find the lowest prices and best coverage options.

How to save on homeowners insurance for a $150,000 house

Trimming your homeowners insurance costs can be a great way to save money throughout the year. Here are a few easy ways to lower your premium costs:

  • Lower your coverage limits. The less coverage you buy, the lower your premiums will be. Your limits should be high enough to cover replacement costs for the property and however much coverage your mortgage lender requires, if applicable, but not so high that you’re paying for coverage you don’t need.
  • Raise your deductible. The higher your deductible, the more you’re willing to pay toward a claim. Insurance companies will lower your premiums in exchange. Just be sure your emergency fund is more than big enough to cover that deductible if you have to file a claim.
  • Keep your credit in check. A good credit history can indicate that you manage your finances well, while poor credit may hint at the opposite. Try to keep your credit healthy to keep premiums as low as possible.
  • Bundle your policies. You can often save by buying homeowners coverage from a carrier you already have a policy through. See if your auto, life, or personal property carrier offers homeowners insurance and, if so, whether it offers a bundle discount.
  • Look for discounts. See which discounts you qualify for, either due to your home’s features, your occupation and affiliations, or even your education level. These can all save you money.
  • Secure your home. If it serves to protect your home, it may reduce your premiums. Adding certain features or protections — like indoor sprinklers, a more durable roof, security system, new smoke detectors, or a fence around your pool — can mean a lower price tag.
  • Shop around before buying. Before you purchase a homeowners insurance policy, shop around and get pricing from multiple carriers. This will give you an idea of the best possible rates and what coverage options you should choose before you commit.

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Homeowners insurance FAQs

While the cost of homeowners insurance can vary widely, some questions about property insurance are common. Here are answers to some frequently asked questions about homeowners insurance. 

What does homeowners insurance cover?

Depending on the coverage options you choose, homeowners insurance can cover everything from smaller repairs and damage to a full rebuild of your home in the case of a total loss. You can also protect all your belongings with actual cash value coverage, minus depreciation.

Most policies provide medical payments coverage, too, in case someone else is injured on your property. You’ll likely be required to purchase liability protection as well.

What isn’t covered by homeowners insurance?

Homeowners insurance doesn’t cover normal wear and tear on your home or any type of neglect of the property. Depending on your location and policy, your coverage may also exclude things like flood damage, hurricanes, mold, and more. 

How much homeowners insurance do I need?

The amount of homeowners coverage you need depends on the requirements of your mortgage lender (if applicable), as well as your budget and what sort of risk you can afford to take on. 

Consider buying enough coverage to at least rebuild your home (at current labor and materials costs) if it’s destroyed, as well as any belongings you wouldn’t want to pay to replace out of pocket.

What are the most expensive states for homeowners insurance?

Texas and Tennessee are among the most expensive states for homeowners insurance, according to NAIC data. The risk of damage from extreme weather, like tornadoes, hail, and hurricanes, contributes to higher premiums in both states. 

Which states have the cheapest homeowners insurance rates?

Based on NAIC data, the cheapest states for homeowners insurance include Alaska, Arizona, Idaho, Nevada, and Wisconsin.

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